As the UK approaches some form of ‘messy’ normality, Paul Montague-Smith – Senior Counsel – Public Affairs at MRM considers the return of business as usual for politicians, and unusual return of business for the economy.
We’re entering the 10th week of lockdown. I don’t know about you but it seems longer, and I’m one of the lucky ones.
I have work to keep me busy and green space I can enjoy. I can only imagine what it must be like if you’re a furloughed worker in the hospitality sector living in a one-bedroom high-rise flat, wondering if you’ll have a job to go back to. There are hundreds of thousands of people in those or similar circumstances. No surprise, then, that the Government gently eased some of the restrictions and set out a plan – of sorts – to give people a sense that there is a way forward.
The way forward is looking very messy though. And the shine may be starting to come off Boris Johnson’s government. The Conservatives still have a commanding 15-point lead in the polls, but the margin between them and Labour looks like it might be starting to narrow. The Prime Minister’s approval rating has begun to track down (-7 points in one month according to YouGov), while Keir Starmer’s is on the up (+5).
Starmer is meticulously and methodically chipping away at the Government’s credibility on issues like the crisis in care homes and testing and tracing. After a couple of lacklustre performances the PM seems to have invested more time to prepare for his weekly face-offs with Sir Keir. Recent polling may just reflect a more normal politics beginning to return. The pause in cross-party conflict while the peak of the crisis was faced is, like the furlough scheme, unwinding.
The Scottish government is now determined to carve its own path, as is the Welsh. So too are some (non-Tory) local authorities – Trade unions have been pushing hard for guaranteed safe working environments.
The reality is that no-one can say their working environment will be safe. They can only reduce risk. Many people are scared to go back to work or send their kids to school because of their personal circumstances. People with conditions that make them particularly susceptible to Covid-19 appear unlikely to be exempted from the winding down of furlough. Businesses need to be prepared to manage their employees’ individual circumstances and concerns as best they can. Not all will be able to offer the same as Twitter and Mastercard.
These issues have been playing out for MPs too. There has been a bunfight in Parliament about whether they should head back to Westminster, whether they can do their job remotely and what safeguards will be in place for them and their staff when they return. In the end the Government has had its way – the Commons is physically back on 2 June, with remote voting no longer possible. But it’s generated great ill-will, particularly amongst MPs representing remote areas, which will accelerate the return to ‘politics as normal’ – i.e. taking proper lumps out of each other rather than appearing to work together in the national interest.
So the future looks messy. Unemployment is expected to double to 3 million, with the viability of whole sectors in question. As government furlough support is unwound, businesses are being expected to pick up the slack. Many won’t be able to. How they manage those issues and the communications around them will become even more important than in normal times. Political and media attention on corporate behaviour through the crisis – who has accessed government support and how they have treated their employees – will be intense for months to come.
With Government debt skyrocketing, the debate in Westminster is beginning to move on to how it will all be paid for. As predicted in our last note, Boris Johnson has confirmed he has no intention to return to the ‘A-word’. If austerity is off the agenda, even without the PM implementing his levelling up agenda too, we can expect to live with much higher debt over the long term, with the Government seeking out radical policies to encourage higher growth, productivity and innovation. As government support schemes are rolled back and work begins on the Budget for November, the Chancellor will be looking for ideas.
We’ll leave Brexit for next month. Suffice to say the Government is still steadfastly refusing to contemplate any extension to the transition period and both sides remain far apart on issues like a level playing field. If no extension is agreed by the end of the month we have until around October for the terms of a future relationship to be struck. Otherwise we’re on course for a WTO-based outcome – which some in Westminster want as they believe it will give the UK the freedom to take the measures needed for our economy to recover from this historic shock.